The auditor-general’s provincial office has expressed concern that the Province is in a prolonged state of undesirable audit outcomes.
WITH more than half the municipalities in the Northern Cape ending the year in a deficit and with a creditors’ billi of R1.73 billion, the auditor-general’s provincial office has expressed concern that the Province is in a prolonged state of undesirable audit outcomes.
The business executive responsible for the Northern Cape, Charles Baloyi, while unpacking the municipal audit results for the 2018/19 financial year, pointed out on Wednesday that local municipalities in the Province had shown yet another overall regression, with six municipalities regressing and only three improving.
“The breakdown in the control environment continued with little response by the leadership to the messages of the AGSA (Auditor-General South Africa) to implement preventative controls,” Baloyi stated.
“The result has been an environment in which supply chain management processes are abused, bank accounts are not properly scrutinised, revenue is lost due to system failures and transactions that are recorded twice, and proper reconciliations are not performed.”
Despite the overall poor performance of municipalities in the Province, a handful of municipalities continued to deliver good audit results, such as the John Taolo Gaetsewe District Municipality that achieved a clean audit outcome.
“The ongoing trend of regressions and unfavourable stagnations (qualified and disclaimer) in the audit outcomes of municipalities is concerning,” Baloyi said.
“This confirms that the leadership continued to disregard the importance of good internal control practices, the value of accurate financial reporting and proper accounting processes. This also highlights that officials who do not perform their duties are still not being held accountable by municipal managers and senior management (no consequences).”
He warned that serious weaknesses in the financial management of local government had not been addressed. This included the poor quality of submitted financial statements and performance reports.
“Credible financial statements and performance reports are crucial to enable accountability and transparency in government. Most municipalities, however, continued to fail in these areas.
“Not only did the unqualified opinions on the financial statements decrease from 41% to 33%, but a mere 15% of the municipalities could give us financial statements without material misstatements.”
Baloyi added that 78% of the municipalities had material flaws relating to their performance reports and were not credible enough for the council or the public to use.
